Is Your “Focus Long-term” Message to Clients Footnoted?


Your advice is sound. You tell clients to focus on their goals, keep their eyes on the prize, it’s the long-term that matters. You remind them to forget the day-to-day gyrations of the market; it doesn’t much matter and they have no control over it anyway. It’s reaching their goals that matters, not investment returns.

Those same clients go to their inbox or mailbox each quarter and open that report you send them without fail. What they inevitably see are those familiar squiggly lines and percentages of your QUARTERLY PERFORMANCE REPORT.

“Focus on reaching your long-term goals” appears to be footnoted

It’s a bit like you’re saying “Do as I say, not as I do (write/ report).”

“Focus on your long-term goals and dreams, and by the way, here are your performance numbers for the last three months”. Oops. The bottom line is that you’re contradicting all your good advice when you give clients reports that consistently highlight the short-term. And you do this four times a year. Why?

It’s not you, it’s your software

Your Software Sucks. The problem as I see it is that you use the same portfolio accounting software (the program used to monitor all clients’ investment activity to the penny) that is designed for you to analyze and track data to also generate reports for clients. Not good.

Yes, if you need portfolio accounting down to the penny, you might need portfolio accounting software. But the performance reports these programs generate are only really useful to you. You use these reports to compare client investment performance against multiple benchmarks, review household asset allocation, and identify accounts that need rebalancing. That’s exactly what these reports are for. But you can’t send these same reports to clients and expect them to convey your message of maintaining a long-term perspective.

It’s time to delete the footnote

Most clients don’t really care what their quarterly performance numbers are. Markets go up; markets go down. They’d much rather focus on living their lives. That’s why they hired you. And you already know that most clients don’t bother to read the reports you send.

But what clients do care about is whether or not they’re going to be able to meet their goals. They care about feeling informed and they care that you’re making things simpler for them. Deliver that experience through the information you share with clients and you both win. But portfolio accounting reports that detail the minutiae from a financial professional’s perspective do nothing to communicate that.

It’s time to rethink the information you share with clients. What can you do to emphasize the long-term perspective and communicate how well prepared your client is to meet her goals? Re-focus the information you share on on the long-term and de-emphasize the sort-term. Simple.

Now if you feel compelled to highlight your client’s portfolio performance over the last three months, that’s fine. Put it at the back of the package or put it in a form that they can get when THEY want it, not on the first page of an information package that you send. Avoid blasting short-term performance right out of the gate.

Consistency and simplicity IS client service

You’re probably thinking that, as a financial advisor, to service your client you need to periodically review their investments to keep them aligned with long-term financial goals and dreams, and to report to them what is going on with their money. You’re absolutely right. It’s also your role to simplify your clients’ lives and help them focus on the right things.

One of the easiest ways to help clients focus on the long-term is to organize the information you share around the long-term, too. After you do it, don’t be surprised if clients tell you how much more helpful the information is and how much more in control they feel.

Turn off the footnotes in your client information. It will change your clients perspective for the better and maybe yours, too.

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Bill is a CFP® professional and is a technology consultant to financial advisors. He writes the monthly technology column for Morningstar Advisor, provides technology commentary for the Journal of Financial Planning, and blogs at his own website,
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